Investors though may find no long term solace until the U.S. economy proves it can sustain a healthy recovery. There is CPI consumer inflation data Friday and consumer sentiment, and focus will again be on earnings news, as Citigroup, Bank of Americaand General Electricreport ahead of the opening bell.

In a late day news briefing, the SEC announced Thursday that Goldman would pay a $550 million fine, much less than the $1 billion expected. The immediate reaction on Wall Street was positive, and traders instantly declared Goldman the winner. No senior Goldman Sachs officials were disciplined, and the company did not have to admit to fraud. Goldman's stock shot higher.

"It's got to help the market. I can't imagine it wouldn't although I would have told you after the Intel earnings (Tuesday), the market would have gone up the next day, but it was kind of ho hum," said BlackRock vice chairman Robert Doll.

"Ending that uncertainty was a big deal," said Doll, of the Goldman news.

In a well-timed coincidence, the Senate adopted financial regulatory reform Thursday, ending weeks of Congressional debate about the shape of the biggest legislative changes to the banking system since the Great Depression.

Doll said he remains underweight financials because the details of the legislative changes still need to be worked out by regulators. "I still believe until we understand the new business model in a lower leveraged world for financials, I think they're going to continue to struggle," he said.

"It's just one more thing we can cross off the list, but that's one where we can't really move on yet," said Steve Stanley, chief economist at Pierpont Securities. "The battle just shifts to the regulatory side and the regulators have to implement all these rules that have passed. It sounds like it's going to be a one or two year lobbying effort to put the flesh on the bones. Congress just passed the bones."

BP Thursday afternoon appeared to have halted the flow of oil into the Gulf of Mexico, 86 days after the Deepwater Horizon rig exploded. Oil ceased to flow from the leak, but a new 48-hour countdown started to see if the capped off well would hold.

"It wasn't necessarily having a big negative impact on the economy, but it might have been having a psychological impact on people and more the general public, than the market crowd," said Stanley.

Steve Massocca, managing director with Wedbush Securities, said the BP news could prove to be bigger going forward than the Goldman news since it removes some of the uncertainty surrounding the energy industry if BP has indeed succeeded in stopping the oil flow. BP also is close to selling $10 billion in assets to Apache, and may announced a deal by next week, according to CNBC's David Faber.

What to Watch

Friday's market will also have to digest earnings news from Thursday's late day earnings reports. Google, for one, was a disappointment. The stock fell sharply even as Google reported a 25 percent gain in profits to $184 billion or $5.71 per share. Google earnings were $6.43 a share, excluding special times, less than the $6.52 per share expected by analysts.

"It will be interesting to see how the market stands up to bad news, like Google," said Massocca. He said the market has moved from being oversold to being somewhat overbought and is now susceptible to bad news.

Massocca said the market's focus has also shifted squarely onto economic news. "I don't know if we're going to get back down to 1000, but to get to 1200, we need the economy to improve," he said. The S&P 500Thursday finished at 1096, up 1 point. The Dow was down 7 at 10,359. Both indices had been down sharply early in the day, as the Empire state Survey, Philadelphia Fed survey and industrial production all showed signs that manufacturing activity is softening.

Apple holds a press briefing at 1 p.m. New York time on its i-Phone. The Wall Street Journal reports that Apple does not intend to announced a product recall on the i-Phone, which has antenna problems.

Jon Najarian, a CNBC contributor with Optionmonster.com, said institutional investors appeared to be buying protection on Apple stock ahead of the announcement. "Institutional investors are scared and they're buying insurance," he said. "This could give you the opportunity for a 10 percent correction."

Najarian pointed to the fact that the implied volatility was higher Thursday than when Apple last reported earnings. "Back in April, the 30-day Implied volatility peaked at 32, but today that same metric is 44," he said in a note. He said a volatility reading of 44 is not a big deal for many stocks, but it is for Apple.

"So while some may not think tomorrow's report is market moving, we beg to differ and so do the 178,000 options trades we're tracking through the first 3 hours today.

Although more calls are trading than puts in AAPL, (105,000 calls to 72,000 puts) that's not unusual given the Appleaholics out there. What is interesting is as we drill into the numbers we see that how nervous big players are, as over 54 percent of the puts were bought on the offer, versus just 48 percent of the calls bought on the offer," he wrote.

While stock market trading was volatile Thursday, the more interesting moves may have been happening in the foreign exchange market. The dollar was down more than a percent against the euro, which crossed the $1.29 level for the first time in two months as sentiment about Europe's sovereign debt problems improves and concerns about the U.S. economy grew.

Treasurys found buyers, which resulted in yields falling. The 2-year dropped to an all time low of 0.577 but finished the day at 0.61 percent.

"I don't think a new low yield really means anything. There was great demand for it. I don't quite understand why. There's a relief over lack of (new) supply, and there's continued uncertainty about a slow patch in the economy but that's all been known. Who would need to come in and buy the lowest yield in the history of the front end of the market. I don't understand it at all,' said John Spinello, Treasury strategist at Jefferies.